Le Lézard
Classified in: Business
Subjects: AVO, ESG

The Corporate Citizenship Project Asks SEC to Regulate Proxy Advisors on ESG in Western Journal Op-Ed

The op-ed, penned by Corporate Citizenship Project National Chairman Terry Branstad, asks the Securities and Exchange Commission to increase the transparency requirements needed from proxy advisors' on ESG ratings.

DES MOINES, Iowa, July 27, 2022 /PRNewswire/ -- The Corporate Citizenship Project (www.CorporateCitizenshipProject.com), a think-tank focused on a data-driven approach to corporate governance issues, released an op-ed in The Western Journal asking the SEC to adopt new regulations on proxy advisors on their Environmental, Social, Governance ("ESG") ratings. The op-ed was written by Corporate Citizenship Project National Chairman Terry Branstad, who previously served as Governor of Iowa and US Ambassador to China.

In the op-ed, Branstad discusses how ESG ratings have morphed from being a Public Relations issue to one with material impacts on shareholder value, given that many investment firms refuse to invest or limit their investments in public companies with poor ESG ratings. Branstad notes that ESG ratings often do not reflect a company's environmental and social impact because proxy advisors have a significant potential conflict of interest. Proxy advisors are currently allowed to have ratings businesses and provide consulting services for public companies to improve their ratings. These businesses, said Branstad, are in a direct conflict of interest.

"Investors may suffer from wrongly investing in companies that have high ESG ratings because they paid for consulting rather than because they are good corporate citizens," he warned.

As evidence of this, Branstad cited that proxy advisor Institutional Shareholder Services ("ISS") appeared to award prime certification to Anglo American Plc, parent of the De Beers Group, which suffered from controversies over "Blood Diamonds" and indentured servitude.

On behalf of The Corporate Citizenship Project, Branstad calls on the SEC to adopt two regulations on proxy advisors. 

First, proxy advisors should be required to spin off their ESG consulting businesses, which present a significant conflict of interest detrimental to investors and public companies that do not engage them. Short of that, proxy advisors should be required to disclose clearly, when releasing ESG ratings, how much money was paid to them by the public company.

Second, proxy advisors should be required to publicly disclose their quantitative and qualitative methodology in calculating ESG scores.

"Given the significant amount of money run under so-called sustainable investment strategies, the SEC must take appropriate action to protect American businesses and investors from being victimized by an arbitrary and conflict-of-interest-ridden ESG system enforced by proxy advisors," wrote Ambassador Branstad.

The op-ed can be found here: https://www.westernjournal.com/branstad-time-end-pay-play-esg-movement/

Ghada Salahuddin
[email protected]

SOURCE Corporate Citizenship Project

These press releases may also interest you

6 déc 2022
TSX VENTURE COMPANIES BULLETIN TYPE:  Cease Trade OrderBULLETIN DATE:  December 6, 2022TSX Venture Companies A  Cease Trade Order has been issued by the British Columbia and Ontario Securities Commissions on December 5, 2022 against the following...

6 déc 2022
Axon Enterprise, Inc. ("Axon") today announced the pricing of its private offering of $600 million aggregate principal amount of 0.50% Convertible Senior Notes due 2027 (the "Notes") to persons reasonably believed to be qualified institutional...

6 déc 2022
Robert F. Kennedy Human Rights (RFKHR) today held its annual Ripple of Hope Gala which honored exemplary leaders across government, business, advocacy, and entertainment who have demonstrated an unwavering commitment to social change and worked to...

6 déc 2022
On 23 Nov, 2022, the Antalpha group, a digital asset platform for institutional partners, held a digital asset conference in Hong Kong. This conference, which gathered over 40 industry leaders from industry giants including Animoca Brands, BC Group,...

6 déc 2022
Virginia Energy Resources Inc. ("Virginia Energy") is pleased to announce that it has closed its concurrent private placement (the "Concurrent Private Placement") in connection with the proposed acquisition of Virginia Energy by Consolidated Uranium...

6 déc 2022
MINISTER'S THOUGHT OF THE DAY "We're off and running! After more than two years of pandemic delays, Montréal and Canada have stepped up to host this generationally significant conference. For Canada, I underlined our commitment to protect thirty...

News published on 27 july 2022 at 15:23 and distributed by: